Bizspace Spotlight

The latest report from the Washington Restaurant Association is a classic case of good news/bad news for the state’s restaurateurs.

The good news is that year over year sales for July were up for 48 percent of those filing reports to the association. That compares with only 25 percent in July 2010 and offers hope in a struggling economy.

The bad news is food prices. A whopping 81 percent of restaurant operators reported higher food costs, more than double the percentage reporting that in July 2010, and enough to more than offset the increased sales.

“The profit margins are actually down,” said WRA president and CEO Anthony Anton.

The increased sales come at a time when restaurants are offering specials and deals to lure customers in the door. Those customers, faced with the same higher food costs at the grocery store, tend to look for bargains when they eat out. So while it may be a good time to be a restaurant customer, it’s a tough time to run a restaurant.

Generally, Anton said, the prices restaurateurs are charging for specials are not sustainable.

“One of the things operators are highly concerned about is there’s not a lot of blood left in the stone,” he said. “We’re on our third year of this (bad economy), so cash reserves are really low.”

The state association’s report, released late Wednesday, closely resembles the National Restaurant Association’s report for July. Even the most positive trend, the increased number of restaurants reporting sales gains, could be viewed negatively: More than half didn’t see year over year gains.

What to make of it? Anton notes that the restaurant business goes up and down almost from day to day, like the economy in general. He predicts “a slow and wild ride out of this recession.”